The global timeshare market has a value of $23,652 million, and it’s still growing rapidly. That’s largely due to a new emphasis on social distancing and the safety of self-catering accommodations when compared to hotels.
Are you one of those avid travelers who are considering signing up for a lifetime of vacations? You might think you understand what timeshare is, but it’s unlikely you’re aware of all the complexities of this type of vacation ownership.
Here’s a basic guide to what’s behind the timeshare definition.
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Timeshare Definition: What Is a Timeshare?
Explaining a timeshare isn’t as simple as it used to be. What started as simply owning a week at a certain resort and occupying it every year has evolved into a myriad of different options.
The basic concept remains the same, though. You pay a once-off upfront cost for the privilege of enjoying holidays for a lifetime, as well as some other expenses involved in maintaining your membership.
You can customize your vacation beyond your original purchase, but extra charges may apply. Overall, a timeshare membership does work out cheaper than booking private rentals every year.
Nowadays, you can choose from a wide network of resorts, clubs, and memberships on offer in every part of the world.
How Does Timeshare Membership Work?
In most cases, when you sign a timeshare contract, there’s no going back. Timeshare contracts usually lock you in for perpetuity. That means when you pass away, you’ll need to will your timeshare to someone else.
It’s difficult to cancel your contract without a very good reason, but you can sell it if you wish. Unfortunately, there’s a glut of weeks for sale on the market, so you won’t get all your money back.
Timeshare isn’t considered an investment since it doesn’t involve any traditional fixed property. Rather, it’s a concept that you’re buying into.
There are several types of timeshare offerings available. These are:
When you sign up for this kind of timeshare, you get to occupy a specific week, resort, and apartment every year. There’s little flexibility available with this type of timeshare.
One of the benefits of this type of membership is that you have the first right of occupation to your apartment, so if you like dependable, predictable accommodation it’s a good fit for you.
You can still enjoy a change of scenery with this type of timeshare by signing up with one of the exchange organizations. These memberships allow you to use someone else’s timeshare interest, but you’ll give up occupation of your own week that year.
Floating week timeshare came about as a solution for those who like to travel in different seasons every year. These weeks usually occupy the less popular seasons outside peak times.
Since anyone can book these out-of-season weeks, it’s sometimes difficult to get the exact dates you want. With a biennial timeshare, you only get to occupy your week every second year.
Timeshare Point Systems
Timeshare points clubs own a portfolio of weeks, and they allocate a certain number of points to each week in their portfolio. The points value of each interval depends on the time of year, apartment size, and location of the property.
Members buy points according to their vacation needs and can exchange these for vacations into resorts with a corresponding or lower value. They can use their points up to the maximum allocation in a wide variety of ways by booking two apartments, or two weeks.
Each member gets a fresh batch of points every year and can save them up for two years if desired. Any unused points expire at the end of a set time period.
You’ll purchase a certain number of points upfront based on how many you think you’ll use each year. Each point costs a certain amount, which varies for different timeshare companies, so your cost will depend on how many points you buy and where you buy your points.
Types of Timeshare Contracts
There are two main types of timeshare contracts. These determine the extent of your rights regarding the property as follows:
Shared Deeded Contract
This type of contract divides ownership equally among yourself and all the other people who own that timeshare apartment, i.e. each owner of a fixed week.
With a shared deed, you can gift, bequeath, and sell your right of ownership.
Right-to-use or Shared Leased Contract
These contracts spread the property between you and others who pay for the contract. It gives you the right to occupy the property for a certain number of years.
You can’t sell or rent this type of timeshare contract, since you have no ownership rights.
Defining a Timeshare in Terms of Cost Savings
The major aim of anyone who buys a timeshare is a desire to save money. Yet, it’s important to realize that buying into a timeshare scheme is akin to purchasing a second home, without the hassles of managing it yourself.
Upfront costs are high, and the annual fees can become challenging if you have a bad year. Overall, when you add the cost of your membership over your lifetime and take inflation into account, it’s a lot cheaper than other options.
How Much Does a Timeshare Cost?
Like the cost of a hotel stay, the price attached to your timeshare depends on a huge variety of factors. One of the biggest factors is whether you buy your vacation product directly from a developer or through timeshare resale listings.
According to the ARDA, the average timeshare interval sells for around $22, 492 nowadays. Since this is an average, it’s reasonable to assume that you can pick up a timeshare week for much less than that, though.
Prices will depend on the desirability of the week you buy, as well as the developer you buy from, and whether you finance the deal or not.
Buying Resale Weeks
You can pick up a timeshare week for as little as $1. That’s because some people going through financial difficulties need to sell their timeshare fast, to eliminate the ongoing costs of their membership.
Like any second-hand purchase, it’s vital to work with a reputable reseller when buying timeshare this way. Buying from a private individual is fraught with risks, as it’s easy to get scammed this way.
In most cases, when you buy your timeshare this way, you’ll enjoy all the benefits of buying direct. Some vacation clubs do place limitations on perks for resales though. Often, it’s worth foregoing a few extra bells and whistles in favor of a cheap purchase price.
Other Costs Associated With Timeshare
Apart from your initial purchase price, you need to pay an annual fee for the upkeep of your timeshare interest. These fees go toward maintaining the vacation properties in tip-top condition.
Other expenses include memberships for exchange companies and exchange fees for booking your accommodation if you belong to a points club.
Timeshare Benefits for Vacationers
Despite naysayers, there are millions of happy timeshare owners worldwide. These seasoned travelers know how to best use their timeshare interests to maximum effect.
That’s because the timeshare model does offer a raft of benefits for owners, such as:
Most timeshare resorts provide high standards of accommodation and many onsite amenities. They’re also usually large, self-catering villas or apartments, so you’ll save on meal expenses during your stay.
You’ll also get free onsite parking at the resort.
You always know what you’re getting when you make use of a fixed timeshare week. So, if you did your homework before you signed up, you’re assured of a good quality vacation every year.
Most points clubs choose only resorts that comply with their standards of service and accommodation. So, you can count on good quality vacations via these organizations too.
A Variety of Choices
Whether you choose a points club or book via an exchange company, you can choose from a huge variety of properties. Some timeshare memberships give you access to cruises and international destinations too.
Due to their contacts in the travel industry, some timeshare clubs can even offer you discounts on flights and car hire.
Do You Need a Vacation Right Now?
Now that you’re on board with the timeshare definition, you’re in a better position to make your own decisions about this controversial type of vacation option.
Nowadays, the timeshare industry has cleaned up its act, and stories of unscrupulous salesmen are few and far between. So, if you can afford to pay for your future vacations in advance, it’s something to consider.
So if you’re wondering “can I cancel my diamond resorts timeshare” you might have to go through a long process before you can successfully do that if you insist on canceling instead of selling the timeshare.
Would you prefer to stick to more conventional vacation choices? Browse our lifestyle section for all the best ideas.